Grain Snippet: Feed Grains Falter on Rain and Record Corn Crops
25/26 barley prices have cooled due to timely local rains which eased drought premiums and increased grower selling pressure. New crop barley prices currently sit around $310/MT in Adelaide’s Outer Harbour and $315/MT in Geelong. Despite the $20/MT pull back from the mid-May highs, a modest drought premium still lingers, and buyers remain cautious about tight domestic carry-in stocks ahead of the November harvest. Currently, 25/26 barley sits at a $35/MT discount to APW1 which has tightened by $5/MT over the last month; this compares to the 5-year average spread of $74/MT for this time of year. This spread is historically tight for this time of year indicating that the market is still showing some favour toward feed grains.
Australian barley is still holding the crown as the world’s most expensive feed grain on a FOB basis driven by Chinese demand and Fair-Average-Quality (FAQ). Ukrainian corn isn’t far behind, propped up by dry weather in key growing regions, while French barley trails in third. Meanwhile, down the other end of the price ladder, Argentine, US Gulf corn and Black Sea barley are looking cheap — nearly US$50/MT less — thanks to bumper global supply, weak futures, and aggressive South American selling. With that kind of gap, feed buyers (especially across Asia and the Middle East) are wasting no time switching to lower-cost commodity and origin options wherever they can.
The July WASDE report offered few surprises for global feed markets, but the broader picture is shifting. While global feed grain supply remains tight, there’s a mixed bag beneath the surface. The USDA pegged Australia’s barley at 12.5MMT, unchanged m/m but down 0.77MMT y/y. With patchy winter rainfall in SA and Vic growing regions, local production potential remains sensitive to conditions through August and early spring.
Barley production among major exporters is forecast at 101.9MMT — up 3.26MMT y/y but still below the 5-year average and trimmed 0.7MMT m/m. In contrast, global corn remains on track for a record crop, with major exporters forecast to produce 644.9MMT — up on 37.99MMT y/y, though revised down 2.9MMT this month due to reduced planted area in the US.
Despite this, overall feed grain ending stocks for major exporters remain historically tight at 52.4MMT, with a stocks-to-use ratio of 8.15%. That’s still lean but slightly more comfortable than last year. The market has become used to tight stocks-to-use in recent years, as global food inflation bites — but rising US corn production and sluggish demand may signal a slow rebuild in supply buffers ahead.
With strong corn crops in the US and Brazil and steady barley output across key exporters, global feed grain supply looks ample.
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